The Dark Side of Netflix

11/06/2013

If you are a displaced Blockbuster customer and you are looking for a new home, you probably came across Netflix Underground while looking for information about Netflix. If you are considering singing up with Netflix, make sure to do plenty of research before you give them your credit card or bank information. If you browse through the years of articles on this site, you will find Netflix has a sketchy reputation built around more than a decade of sleazy corporate behavior. Make a list of everything you hated about Blockbuster Online and multiply that by three.

Yes, Blockbuster was a profoundly lousy company with many sleazy tactics, but many of their tricks in the DVD-by-mail business were pioneered by Netflix long before Blockbuster Online even mailed their first DVD. If you are a Blockbuster refugee and you are considering giving Netflix a try, do yourself a favor and first browse this site or do some Internet searches with the following terms.

10/11/2011

Netflix has done another 180. Customers got angry about all of the ridiculous changes at Netflix, and now Netflix is trying to un-ring the bell on the stupidest move the company has made in years.

Qwikster was ridiculed as a stupid name, but now the name seems sort of fitting, because the fledgling company did not last very long. The Qwikster spin-off (Netflix's answer to New Coke) proved so profoundly unpopular with consumers, Netflix scrapped the new company, which was really just Netflix in disguise. For now, Netflix plans to keep its DVD-by-mail and streaming services under one name and one Web site.

It is interesting to see how quickly Netflix will backtrack when the company realizes customers have become unacceptably angry. Also note Netflix did not kill Qwikster until well after the consumer backlash got out of control. The Qwikster name was already showing up in advertisements. It was practically a done deal. This mistake had to cost Netflix a lot of money, and it has cost the company a huge amount of credibility. The stakes were pretty high on this Qwikster launch. If the subscribers had not revolted so harshly, there is no doubt they would have gotten stuck with Qwikster.

If you were hoping Netflix is going to take back the 60% rate hike and two separate plans for DVD-by-mail and streaming, keep hoping. The higher fees and service split are here to stay. Although, past behavior indicates that Netflix will reverse its course if enough subscribers cancel.

Netflix has truly failed on this split of DVD-by-mail and streaming. What was once a beacon of innovation (for some) in the business world now looks like a sad, reactive, desperate, and pathetic company. With this whole service-split debacle, Netflix sort of came off looking like, well, Blockbuster a few years ago. Way to go, Netflix. Start imitating the company you once humiliated.

9/19/2011

Jason Castillo's finances are about to get a lot better. He is about to get a big, fat check from Netflix.

Jason Castillo, hold out for huge money, and consider hiring an attorney so Netflix does not rip you off in the contract. Netflix is worth billions of dollars, and they will have to spend millions advertising Qwikster. Do not let Netflix take advantage of you. Think of all the money you could ever expect to get from Netflix and then triple it. Netflix needs to buy your Twitter account more than you can possibly imagine. Do not be afraid to get greedy. Netflix never is.

-- Update 9/22/11 --

As of the morning of 9/22/11, Jason Castillo's @Qwikster account is showing some odd activity. A couple of days ago, he made mentions of offers to buy his Twitter handle, negotiations, and contracts. Now, however, all of those mentions have been removed. The pot-smoking Elmo image was one of the first things to go. At the time of this update, Jason Castillo had no tweets since 9/19/11, leaving a gap of a few days. Curiously, the tweets end the same day Reed Hastings stunned the investment world by announcing Qwikster as part of a half-hearted apology.

Jason Castillo must either have someone advising him to remove mentions of Netflix, or maybe Netflix has requested he not mention any negotiations. Clearly, something is going on. Do not be surprised if Netflix/Qwikster owns that Twitter account pretty soon. Hopefully, Jason Castillo has someone smart guiding him through this process.

-- Update 9/23/11 --

Jason Castillo suddenly came back with a flock of tweets late last night. The pause in Tweet activity was strange. One must wonder if Netflix realized Qwikster is a ridiculous name and they decided to go with something less cheesy.

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﻿On Mashable, Chris Taylor sums up what most marketing executives are probably thinking today about Netflix's horribly bungled launch of Qwikster. Yes, Qwikster just could turn out to be Netflix's New Coke.

Facing an overwhelming backlash from subscribers, Netflix CEO, Reed Hastings has come forward and apologized for what has probably become the biggest public relations debacle in the history of Netflix.

When Netflix abruptly spilt its DVD-by-mail service and streaming video service into two separate services and effectively increased subscription fees by 60%, many--perhaps millions--of Netflix's subscribers became angry and threatened to close their accounts. Arrogantly, Netflix did little to manage the crisis. Netflix's attitude seemed to be: We are the leader in the video rental business. If you want our services, you will accept delivery however we choose, and you will pay whatever we tell you to pay.

Netflix did not use those exact words, but that is what the public heard. Rightfully so, the subscribers rebelled and began canceling their subscriptions.

Under such pressure, one would assume Netflix might retreat and come up with a plan to assuage consumer anger, but Netflix did not do that. Sure, Reed Hastings/Netflix apologized for being arrogant and communicating poorly, but that is about it. In a further act of arrogance, Netflix has chosen to rename its original DVD-by-mail service and permanently break it off from Netflix (as if that will fool enough people).

The new name is Qwikster. Yes, Qwikster is a cheesy hipster appellation, and this playfully misspelled name is so 1990s. Sure, Qwikster sounds like some shady file-sharing Web site from Romania, but it is actually a repackaging of Netflix's DVD-by-mail business. (Yes, this probably will fool enough people.)

If you want to be a member of Qwikster, you are going to have to pay for it, and it will show up as a separate charge on your credit card each month. Even if you maintain a Netflix subscription for streaming content, your credit card statement will have a charge for Netflix and another charge for Qwikster.

Adding to the inconvenience for subscribers, Netflix and Qwikster are to function independently. For example, if you review a movie on Qwikster, the review will not appear on your Netflix account, even though you may be paying for both services. Also, if you need to update your credit card information, email address, home address, phone number, or other account information, you will have to do so twice: once on the Netflix site and once on the Qwikster site.

Some consumers may feel more comfortable with paying for two subscriptions when the subscriptions are under different names, but the reality has not changed. Netflix has reduced subscriber benefits and is charging significantly more for significantly less. If making payments under two different company names makes subscribers feel better about it, then so be it.

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